My son’s Tuition, Fees & Books minus Grant= $750
He also received $2700 in local scholarships that were payable to him (& reported to college financial aid office), but this $2700 was not included in box 5 Scholarships & Grants on 1098T we received from school.
So his taxable scholarship is $2700 minus 750 or $1950? He also had $2100 in wages for the year. Does he need to file a tax return because of the taxable scholarship or can he skip filing since total taxable income for year is only $4050 ($1950 schol + $2100 wages)?
Yes, the taxable amount is $1950. Yes, he could skip filing because taxable scholarships and grants are earned income for the purpose of filing requirements and the standard deduction. Does he have any withholding to get back? Also, see IRS Pub 970, chapter 2 about you possibly being able to take the AOTC if he were to include more scholarship/grant amounts in his income.